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As 2025 approaches, over 1.2 million Canadian mortgage holders face renewal of their home loans, with 85% of these mortgages signed during historically low interest rates of 1% or less. Now, homeowners must navigate significantly higher rates, creating economic challenges as the Bank of Canada maintains its overnight rate at 3.75%, a reduction from its recent peak of 5%.

While current interest rates are lower than during the recent peak, they remain much higher than the near-zero rates available during the pandemic. First-time homebuyers may find the current environment more favorable, but many existing homeowners face financial strain. Mortgage delinquency rates, though still below historical averages, have risen slightly to 0.19% in 2024, with other credit indicators also showing signs of stress.

The Canada Mortgage and Housing Corporation warns of increasing financial vulnerabilities tied to household debt, particularly as more mortgages come up for renewal in 2025 and 2026. Borrowers renewing at higher rates could experience intensified financial pressures, potentially impacting their ability to manage payments and maintain financial stability.

Read the full article on: CTV NEWS